Diageo shares tumbled 6% after the British spirits maker slashed its interim dividend by more than half and downgraded its full-year outlook amid a sharp U.S. spirits rout. The company reported first-half organic net sales declined 2.8% to $10.46 billion, missing analyst expectations, with North American revenues falling 6.8%.

Chief executive Sir Dave Lewis attributed the downturn to pressure on disposable income and increased competition from more affordable alternatives. The company's premium tequila brands suffered particularly hard, with Don Julio net sales plunging 20.9% and Casamigos dropping 30.9%. Diageo now expects organic net sales to decline 2-3% for fiscal 2026, down from prior guidance of flat to slightly down.

Greater China compounded the challenges, with net sales falling 42.3% organically due to policy changes affecting Chinese white spirits. Against these declines, Europe delivered organic net sales growth of 2.7%, led by Guinness, which grew 10.9% across all regions except Asia Pacific. The company maintained its free cash flow guidance of approximately $3 billion and expects its Accelerate cost savings programme to deliver 50% of its $625 million three-year target in fiscal 2026.